Answer on Microeconomics Question for moe

if a nations average annual gdp growth rate is 2.5%, based on the rule of 70, how long will it take for the nations real gdp to double

Expert's answer

2012-12-07T04:10:46-0500

It is also interesting to know the mathematical trick called the rule of 70.& This rule allows us to easily figure out the number of years it would take to double our income (or GDP) at a given interest rate (or rate of growth). &

Number of years to double = 70/rate (either growth or interest).According to rule provided we can calculate:Number of years to double = 70/2.5%=40 years

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